RMI Fined $1M for Illegal Exports

Photonics.comJun 2010
DENVER, June 23, 2010 — Optical components maker Rocky Mountain Instrument Co. (RMI) of Lafayette, Colo., pleaded guilty Tuesday to one count of exporting defense articles without a license, the Department of Justice said. The company has agreed to forfeit its $1 million in proceeds from the illegal action and spend five years on probation.

Appearing in court to enter the guilty plea was RMI CEO Steven Hahn. In its statement about the settlement, RMI said the company cooperated fully with the DoJ during the investigation, which began in October 2007, and since then performed a complete review of its export control compliance system and developed a program that meets or exceeds recommended standards.

“This settlement with the Department of Justice is an unequivocal statement by RMI that it stands as a partner in compliance with the US government,” said Hahn. “The errors we experienced were examined carefully, we took substantial remedial measures, implemented new controls and are now conducting operations at RMI as a model in this industry with respect to US export controls.”

"The technology illegally exported in this case involves sensitive military information," said David Gaouette, US Attorney for the District of Colorado. "Most of the technology in question is currently being used by American troops in Afghanistan and Iraq, and as such must be protected to safeguard our military men and women."

According to the DoJ, between April 1, 2005, and Oct. 11, 2007, RMI exported prisms and technical data related to various optics used in military guidance and targeting applications and designated as defense articles by the US, without having first obtained a license or written authorization from the US Department of State. The items were sent to Turkey, South Korea, China and Russia.

"Today's guilty plea and sentencing against RMI illustrates that illegally exporting sensitive US technology is a crime taken seriously by the US government," said Kumar Kibble, special agent in charge of the Immigration and Customs Enforcement (ICE) office in Denver. "ICE is fully committed to enforcing US export laws and regulations. We will continue to investigate individuals and organizations that illicitly trade with foreign entities."

"The technologies illegally exported by Rocky Mountain Instrument Company are part of critical weapons systems used by our soldiers, marines and airmen in Iraq and Afghanistan. The Defense Criminal Investigative Service will continue to vigorously investigate those Department of Defense contractors who violate not only the law but the trust placed in them as contractors and subcontractors of the Department of Defense," said Special Agent in Charge J. Byron Hogan. "The technical advantage the Department of Defense possesses with regard to military optics remains critical to the success of our warfighters and compromising that technology puts our service men and women at risk. DCIS remains committed to combating these threats in conjunction with our law enforcement partners, the US Attorney's Office, and ICE, and ensuring that DoD weapon systems and technologies are secure."

ICE first conducted a raid on RMI in October 2007. In June 2009, RMI filed for Chapter 11 bankruptcy protection; the raid was reportedly one of the contributing factors (See RMI Files for Bankruptcy)